The Women Entrepreneurship Development Project (WEDP) aims to provide more opportunities for female entrepreneurs. The International Development Association (IDA) of the World Bank is continually funding more than $2 million to women in Ethiopia looking to start or improve their businesses.
The program’s contributions are improving the Ethiopian economy and the empowerment of women. It is one of the only women-focused lines of credit operations in the world and has been the most effective.
Signs of Progress
Additionally, 16,000 women have participated in business training thus far. On the other hand, firms participating in the WEDP are experiencing growing incomes. In comparison to those not working with the program, income has increased by 40.77 percent. With increasing profit, these firms are able to expand employment by 55.73 percent.
Giving Women Entrepreneurs a Feasible Option
The Women Entrepreneurship Development Project’s success can largely be accredited to having “missing middle” loans. In many instances, banks require a minimum of a $50,000 loan and microfinance options are at most $5,000. These requirements make it nearly impossible for female entrepreneurs to get a loan suitable for their business.
The WEDP provides an average loan of $12,500 and has successfully reduced the collateral from 200 percent to 125 percent. The IDA saw an untapped market and is now profiting off of the potential for these entrepreneurs to expand their businesses.
Another reason why the Women Entrepreneurship Development Project is succeeding is due to the specific and goal-oriented plan of the World Bank. The objective in Ethiopia is to improve both earnings and employment of female-owned Micro and Small Enterprise’s (MSE).
The most common obstacle businesses face in Ethiopia is access to finance. In fact, only 40.4 percent of these owners have access. As a result, the project focuses on ensuring easy finance options and offering unique financial instruments that fit the needs of each business.
It is also useful that the project offers programs to teach entrepreneurial and technical skills. The World Bank aims for access to microfinance and a dedicated line of credit, development of entrepreneurial skills, technology and cluster development and, project management, advocacy and outreach, monitoring and impact evaluation.
Partnerships and Impacts
Without partnerships with the Department for International Development (DFID), the Canadian International Development Agency (CIDA), the U.K., Italy and Japan, the success of the WEDP would not be possible. Many countries and agencies have offered financing or other assistance contributing to the rise of female-owned business in Ethiopia.
Not only has the Women Entrepreneurship Development Project been hugely successful in Ethiopia, but it is also inspiring initiatives to finance female-owned companies in countries like Nigeria, Zimbabwe, Madagascar, Turkey, Mexico and Indonesia. Should these countries follow suit, the impact could be unprecedented.
Even though the project has a few more months until its completion, it is providing an opportunity for the government of Ethiopia to support the Small and Medium Enterprises (SME) of women entrepreneurs.
– Jessica Haidet